XTI Aerospace, Inc. (INPX)·Q2 2023 Earnings Summary

Executive Summary

• Q2 2023 revenue was $2.06M, down 20% year over year (Q2 2022: $2.58M) and down sequentially from Q1 2023 ($3.10M), reflecting delayed shipments and lower SAVES sales; gross margin improved sharply to 81% from 67% YoY .
• Non-GAAP Adjusted EBITDA loss improved modestly to $5.0M from $5.2M a year ago; pro forma non-GAAP net loss per share was $0.18 vs $2.72 in Q2 2022, aided by lower operating expenses and mix-driven margin gains .
• Cash and equivalents of $15.68M and short-term debt of $13.80M as of June 30, 2023; equity was $6.54M, underscoring liquidity but constrained financial flexibility .
• Strategic catalyst: definitive merger agreement with XTI Aircraft; management expects closing in Q4 2023, citing 700+ conditional pre-orders (~$7.1B potential at $10M list price per aircraft, subject to certification and execution) as a long-term narrative driver .
• Wall Street consensus (S&P Global) for Q2 2023 was unavailable; no formal quantitative guidance provided in the quarter .

What Went Well and What Went Wrong

What Went Well

• Gross margin expanded to 81% (from 67% YoY) driven by lower cost of revenues in SAVES and IIoT/RTLS product lines, demonstrating improved unit economics and favorable mix. “Inpixon improved its gross margins during the quarter as a result of lower cost of goods within the IIoT and SAVES business lines” .
• Management advanced strategic alternatives: “recently announced entering into a definitive merger agreement with XTI Aircraft…We believe this transaction will be transformational” (closing anticipated in Q4 2023) .
• Balance sheet: “over $15.7 million in cash and cash equivalents as of June 30, 2023,” providing runway for operations while pursuing strategic actions .

What Went Wrong

• Revenue declined to $2.06M, with management citing “delayed shipments and lower sales for the SAVES product line” impacting Indoor Intelligence sales .
• Continued operating losses: loss from operations of $6.66M and net loss from continuing operations of $7.33M, reflecting limited scale and transaction costs .
• No quantitative guidance issued, reducing near-term visibility; S&P Global consensus was unavailable for Q2 2023, further limiting benchmark comparisons .

Financial Results

Core P&L and EPS

*Consensus estimates unavailable from S&P Global for INPX Q2 2023.

Balance Sheet and Liquidity KPIs

Segment Breakdown (latest disclosed)

Note: Q2 2023 segment mix not disclosed in the press release/8‑K; consolidated results provided .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We’re excited to have recently announced entering into a definitive merger agreement with XTI Aircraft…We believe this transaction will be transformational…” (Nadir Ali, CEO) .
• “Inpixon improved its gross margins during the quarter as a result of lower cost of goods within the IIoT and SAVES business lines.” .
• “We have preserved a solid balance sheet with over $15.7 million in cash and cash equivalents as of June 30, 2023.” .
• Q1 context: “achieve a 17% increase in revenue…while effectively reducing our operating expenses…focus on the growth of our RTLS business line.” .
• Q3 context (trend): transforming RTLS to recurring, higher-margin subscription; continued transaction progress on XTI and Damon .

Q&A Highlights

• The company hosted a business update presentation at 4:30 p.m. ET and invited shareholder questions via email; full call transcript was not accessible via our document system due to a retrieval error, so specific Q&A exchanges are unavailable .

Estimates Context

• S&P Global Wall Street consensus for Q2 2023 revenue and EPS was unavailable for INPX; as a result, no beat/miss determination can be made for the quarter. The company did not issue quantitative guidance in the press release/8‑K .

Key Takeaways for Investors

• Margin progression is an operational bright spot: gross margin at 81% reflects favorable mix and lower costs; watch whether RTLS subscription migration sustains margins amid revenue variability .
• Revenue softness is timing/mix-related (delayed shipments, SAVES), but underscores scale challenges; look for order conversion and shipment normalization in 2H .
• Liquidity is adequate near-term (cash $15.68M vs short-term debt $13.80M), but balance sheet flexibility is limited; monitor capital actions, debt exchanges, and ATM usage .
• The XTI Aerospace merger is the core narrative catalyst; while conditional pre-orders are sizable, execution, certification, and financing risks are non-trivial—position sizing should reflect binary outcomes .
• With no formal guidance and absent consensus estimates, near-term trading may be headline-driven around transaction milestones and margin updates; consider event-driven setups into merger vote/close windows .
• Sequential comparisons (Q1→Q2) show improved operating loss and Adjusted EBITDA alongside margin gains; confirm durability in Q3/Q4 prints .
• Monitor SAVES/Indoor Intelligence sales cycles and deferred revenue trends as leading indicators of backlog and subscription mix quality .

Notes:
- All quantitative figures above are sourced from company filings and earnings materials cited in brackets.
- Consensus estimates (S&P Global) were unavailable for INPX Q2 2023.